MARKET SCAMS

[thepennyking]

I'm not holding my breath...there are some who try to do good and make mistakes and get killed for them, and then there are those who know what they are doing is wrong and then keep doing it despite their awareness of the fact of the errors.

More evidence for the public jury:

Scandal Monger



While jurors in the Tyco corporate-looting case may be spending the weekend in recess on the verge of a mistrial, executives involved in America’s corporate scandals are hardly breathing easier after last week’s crushing 24-year sentence of a former executive of energy giant Dynegy.
The six-month trial of two ex-Tyco men, accused of stealing $600 million, was hurtling to an impasse on Friday. Jury deliberations had turned ugly, threatening the outcome of the case.

New York State Judge Michael Obus finally agreed to let the jurors out early after they sent him a note saying they could not continue “in good faith”.

They reconvene tomorrow.

In one of the biggest cases of alleged corporate corruption, former Tyco chief Dennis Kozlowski and chief financial officer Mark Swartz are accused of taking unauthorised bonuses, illegal loans and selling artificially inflated stock from 1995 to 2002.

The trial is the first of a series in which high-flying executives with lavish lifestyles are accused of fixing the books or securities fraud from the late-1990s bubble economy. If the jurors are unable to reach a unanimous verdict, prosecutors face the difficult task of deciding whether or not to re-try it at massive taxpayers’ expense.

On Thursday, jurors sent three notes to the judge suggesting they were leaning toward guilty verdicts. But at least one juror appeared to be disagreeing.

“Many incendiary accusations have been exchanged that we believe have compromised the fairness of the process,” said one note. Another described deliberations as “poisonous” If found guilty, the ex-executives face up to 30 years in prison.

Two thousand miles away, in Houston, the tough new federal rules to discourage white collar crime led to a breathtaking sentence on Thursday for former Dynegy tax director Jamie Olis, 38, for accounting fraud.

By illegally disguising debt in 2001, he helped cause more than $500m in stock losses. That same year, Enron, also with a Houston HQ, collapsed.

There is no parole in the federal system, so Olis will be behind bars until he is 62. After Federal Judge Sim Lake read the verdict, Olis and his wife, holding their six-month old daughter, wept. He had gambled and lost in choosing a jury trial over cutting a deal.

His own boss Gene Foster, a co-conspirator, pled guilty to one count and testified against him in his November trial. The sentence dwarfs that of Enron executives such as Andrew Fastow, former finance chief. Fastow pled guilty and is expected to get 10 or fewer years behind bars. Enron’s former treasurer is serving five years, also after pleading guilty.

Meanwhile, Richard Grasso, former chairman of the New York Stock Exchange, is apparently the latest target in the sweep against white- collar crime. The New York Times reported on Friday that the securities and exchange commission is questioning whether a meeting, in which Grasso was given a $140m payout, broke the Big Board’s own by-laws.

The issue of his compensation was added at the last minute to the agenda of a meeting in August. He apparently faces being forced to repay $120m.

In on the Grasso probe is the office of crusading New York attorney- general Eliot Spitzer, which is reportedly bringing yet another scandal to the surface. According to the Financial Times, Spitzer has served Royal Bank of Canada with legal papers. The bank allegedly withheld overpayments from clients and tried to halt an internal probe.

Meanwhile, the UK’s watchdog agency – the Financial Services Authority – has questioned allegations that the bank’s foreign exchange trading desk in London withheld tens of thousands of dollars in over-payments.

The bank says the transactions were routine. On Friday it confirmed Spitzer “made an inquiry in response to the story”, according to the Canadian Broadcasting Corporation. The allegation is “based on innuendo, blown out of proportion and sensationalised,” added the bank.




Ros Davidson

28 March 2004

http://www.sundayherald.com/40779